Head of the Ministry of Finance: In 2018, tax revenues in the state treasury of Armenia will grow by 112 billion drams

ArmInfo. Capital expenditures of  the state budget of Armenia in 2018 are planned to increase by 73.8  billion drams, which will be directed to road construction,  irrigation system and energy. "No sensible investor will invest money  in the Armenian economy if we do not have normal roads," Armenian  Minister of Finance Vardan Aramyan told ArmInfo reporter on October  22 during a seminar on "The State Budget for 2018" organized with the  assistance of the German Society for International Cooperation (GIZ).  Note that in 2018 the investment-to-GDP ratio promises to just return  to the indicators of 2016 - 18.4% of GDP, instead of 18.2% expected  by the end of this year.

The nominal GDP of Armenia in 2018, according to the draft budget for  the next year, will grow by 441 billion - from the expected by the  end of 2017 5,409.1 billion to the projected 5.850.7 billion drams.   Economic growth in 2018 is planned at 4.5% or $ 11.948.9 million.  Forecasts of economic growth for the next year are largely due to the  outlined positive dynamics this year, as a result of which the  Ministry of Finance raised forecasts for economic growth in 2017 from  the planned 3, 2% to 4.3%. The Minister of Finance recalls that,  according to the results of the first half of the year, economic  growth in Armenia was about 6%, which is significant enough for the  formation of positive expectations in the future. In the matter of  ensuring economic growth, one of the locomotives is promised by  industry and the services sector. So, 4.5% of GDP will be provided at  the expense of industry 1.1%, agriculture - 0.6%, services - 2.2%,  net indirect taxes - 0.4%. 12-month inflation by the end of 2018 will  be 4%, instead of expected in 2017, 2.4% and actual -1.1% at the end  of 2016. Exports will reach 37.4% of GDP, against the projected in  2017 37% and 33.1% in 2016.

Expectations, as before, are supported by positive signals that the  republic receives from outside.  Traditionally, such are the  expectations of the restoration of the Russian economy, confirmed by  international authoritative structures that the Russian economy has  emerged from the recession and returned to a moderate growth rate in  2017. In addition, the dynamics of the copper and oil market are also  encouraging.

According to the Minister, the consolidated budget of Armenia for the  year 2018 in terms of revenues will make 1.307.3 billion drams  (without the receipt of interbudgetary transfers). Taxes will grow by  112 bln drams - according to the results of the year, the current  income is expected at the level of 1,210 trillion drams, and by the  end of the last year the revenues amounted to 1.135.9 billion drams.  Of which, in 2018, taxes will amount to 1.247.9 billion drams or  21.3% of the runway, against 21.2% in the current year (1135.0  billion drams) and 21.3% in 2016 or 1076.9 billion drams (adjusted  taxes / GDP will be 21.3% instead of 20.9% by the end of 2017 and  actual 20.3% last year). Next year, as explained in the Ministry of  Finance, the state treasury will receive less than 395 billion drams  due to business payments for VAT, income tax and profit tax.

The deficit / GDP will be 2.7%, instead of the forecasted 3.2% by the  end of this year. and 5.5% in the end of 2016 - 156.9 billion drams,  150.1 billion and 284.7 billion drams, respectively. Of these, AMD  77.1 billion will be financed from domestic resources, including an  increase in domestic debt. Despite the high cost of domestic debt,  Vardan Aramyan explained, the funds will go into the pockets of  Armenian residents, turning into a multiplier effect in the country's  economy. 79.8 billion drams or $ 166 million will be attracted from  outside.

According to the spending line, it is expected to be 1.464.2 billion  drams (1.360.1 billion in 2017 and 1.420.6 billion in 2016), of which  capital expenditures will make up 172.4 billion drams instead of last  year's 98.6 billion drams and 160 billion in 2016 year. Capital  expenditures will be mainly implemented through external borrowing  and invested in road construction, irrigation systems and the energy  sector of the country. By the end of 2018, the state debt, compared  with the current year, will grow another $ 300 million - to over $ 7  billion and account for 60% of GDP.